From New Jersey Monthly

Happier or Not? Independent Doctors Join Larger Groups

Wayne J. Guglielmo


November 03, 2017

In This Article

From Independent to Large Group Member

Now, Rombough has made the transition from independent practitioner to large-group member. He uses the practice-wide EHR system (a fire damaged his old office this summer, but his patient records had already been stored in the company cloud), and enjoys access to the latest imaging technology, including a costly digital X-ray machine; centralized billing and other administrative support; and the camaraderie and clinical integration of a large multispecialty practice.

Reflecting on the change, Rombough is happy to be a clinician freed of the attendant hassles of running a practice. "Yes, there's been some loss of autonomy," says the son of a man who preached independence, "but I can live with it. Every day, things get better."

Among the biggest changes taking place in American medicine today is a shift in how doctors are paid. Historically, they have been paid on the basis of services provided. More procedures would mean more income. But to healthcare reformers concerned about runaway costs, this fee-for-service model looked unsustainable. They proposed a new model, spelled out in the ACA for Medicare reimbursement.

In lieu of paying doctors (and hospitals) for services rendered, the new model rewards them for keeping their patients healthy in a cost-effective way. If doctors succeed—for example, by getting more of their diabetic patients to take regular eye and foot exams or reducing hospital admissions for their chronic asthmatics—they share some of the money they saved the system. If patient outcomes worsen, they risk lowering or even losing their reimbursements. Although the ACA rules apply specifically to Medicare, private insurers also see merit in fee-for-value.

There is a catch, however: The new reimbursement model requires a greater level of organization, integration, and electronic-assisted communication than most small practices can muster. An EHR system, for example, can cost a practice as much as $100,000, although the federal government will defray some of that cost through its EHR Incentive Program.

"If you aren't equipped to participate in pay-for-value and data-driven payment schemes, you either make a big investment or join someone who's already made that investment," says Robert Brenner, a family physician and chief medical officer of Summit Medical Group.

Although SMG and other groups are growing rapidly in New Jersey, small practices still predominate. In 2009, the most recent year for which reliable numbers are available, New Jersey had approximately 9100 physician offices employing 70,000 medical professionals and other staff, according to a report commissioned by the Medical Society of New Jersey (MSNJ). With roughly 27,500 primary care physicians statewide, that's an average of only three doctors per office. "It's a far cry from my colleagues in other parts of the country like the Midwest, where multidoctor practices are the norm," says MSNJ CEO Larry Downs.

Experts say there are two main reasons New Jersey has lagged behind other parts of the country in consolidation. Here, and on the East Coast generally, there are plenty of specialists and high-quality medical resources, such as imaging centers and rehabilitation facilities. "Even the rural areas [on the East Coast] are not that distant from world-class medical services," says David Gans, senior fellow in industry affairs at the Medical Group Management Association, a Colorado-based trade group for practice managers.

Second, New Jersey is served by an unusually large number of health insurers, making it difficult for any one or two to corral the market and limit physician reimbursements. "Reimbursement here was not as bad as in other parts of the country, so doctors didn't need to be part of a larger group to gain economic clout," explains John D. Fanburg, chair of the health law division of Brach Eichler, a multidisciplinary law firm based in Roseland. "They could retain their autonomy in an individual or small practice and still make a living."


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